Increase to School Tax Rate Now Proposed at 7½ Cents

The tax rate to support Lawrence Township’s public schools for the 2013-2014 school year will climb to $2.43 per $100 of assessed value – an increase of about 7½ cents over the current school year – under the proposed budget sent last week by the township board of education to Mercer County’s executive county superintendent of education for review.

That $67.5 million spending plan included changes made to an earlier draft of the budget that was discussed in detail at the Lawrence Township Board of Education meeting held on Feb. 13.  

During that February meeting, the 2013-2014 proposed budget then stood at $66.7 million and called for a tax rate increase of about 6 cents, but school district Business Administrator Tom Eldridge stressed at that time that there were many variables still in play – including state aid and federal legislation like the Affordable Healthcare Act – that could require changes to the budget.

Gov. Chris Christie delivered his state budget address in late February and the district learned then what state aid it would receive.

“We saw a roughly $50,000 increase [in state aid] and then it was, at the same time, taken back,” Eldridge explained at the special school board meeting held last Tuesday (March 5).

“And what I mean by that is that we did see a revenue increase of a little bit more than $50,000, but at the same time the governor said that they can no longer afford to pay for notes that they issued, so they passed that appropriation on to us also. So it’s tantamount to saying to your child, ‘I’m going to give you a raise in your allowance but, by the way, you have to pay for your school lunch now.’ And that’s exactly what it was.”

“Isn’t it more like, ‘You have to pay my credit card bill?’” board member Bill Michaelson interjected.

 “Ok – it’s much more like, ‘You have to pay my credit card bill,’” Eldridge agreed. “It netted out to about a $3,000 increase overall for us and that’s it… So that’s the one thing we had to deal with. The second was the Affordable Healthcare Act, and that figures into this budget also.”

The Affordable Healthcare Act – federal legislation that goes into effect on Jan. 1, 2014 – will require employers of 50 or more people to offer family healthcare coverage to employees who are not considered full-time but work an average of 30 or more hours per week, Eldridge previously explained at the Feb. 13 board meeting.

“We still do not know everything we need to know about this. So what we did was we budgeted for 62 people who are currently not covered who we know the law will cover,” Eldridge said last week. “We took the least expensive plan that we had. We don’t know what the minimum plan is, so we’re preparing for at least that. But in budgeting the least expensive plan I did budget the family plan for each one of those people, so that hedges some cost there.”

Doing that – building in Affordable Healthcare Act coverage for the first half of 2014 - added about $550,000 to the revised 2013-2014 budget, he said.    

“We also don’t know what the pass-through costs are going to be from our contractors,” he continued. “I’m concerned, at this point, about what our bids will look like when we get them back from our transportation contractors because if [the contractors who provide buses to the district] are not providing insurance right now to their employees, and they have to do that, that cost will certainly be passed on to us in the form of higher bids. So we’re looking to address that.”

When asked by school board President Laura Waters about what impact the federal sequestration will have on the district, Eldridge answered that it could result in cuts to some programs but “fortunately we don’t rely on the federal government as heavily as one might think… We always use federal funds to amplify what we what we do well as opposed to lean on them for the basics. We try never to use it for hiring people.”

Eldridge and Superintendent Crystal Edwards said the district is looking at ways to trim the budget, but they noted that any significant cuts will likely impact students through, for example, programs and services being reduced or eliminated and class sizes becoming larger.

After Mercer County’s education office completes its review of the proposed 2013-2014 budget, the district will then hold a formal public budget hearing on March 21, at which time the school board can either adopt the budget as is or make changes.

If the school tax rate for 2013-2014 does increase 7½ cents to $2.43 per $100 of assessed property value, the owner of a home assessed (for tax purposes) at the township average of $160,828 would, in turn, pay about $3,908 in school taxes, or about $128 more than the current school year.

“Over a period of five years, we’ve seen an increase in school taxes of 3.4 percent. That’s not 3.4 percent every year. That’s 3.4 percent over five years. At the same time this was happening, the consumer price index went up approximately 7 percent and it’s a gauge of inflation. So we’ve clearly beat inflation," Eldridge said.

Full audio from the March 5 school board meeting can be found on the school district’s website.